Harvey Golub And Kenneth I. Chenault, American Express
It has become a truism of management practice: A CEO faces no more important task than grooming an eventual replacement. Harvey Golub, the chairman and chief executive of American Express Co. (AXP), systematically studied the succession practices of many corporations. But unlike many CEOs, Golub has applied what he learned to good effect. At a time when failed succession plans are roiling Campbell Soup, Xerox, Lucent Technologies, and other well-known companies, AmEx is moving seamlessly from one CEO to another.
Golub's own entry into the corner office in 1993 was anything but smooth. His predecessor, James D. Robinson, had been ousted after his attempt at reinventing AmEx as a financial supermarket failed, imperiling its survival as an independent company. In restructuring AmEx from stem to stern, the hard-driving Golub shrewdly came to rely on Kenneth I. Chenault, a first-rate marketer who had joined AmEx in 1981. Golub rewarded Chenault's critical contributions to the revival of the AmEx brand with a series of promotions, naming him president and chief operating officer in 1997.
Over the past few years, Golub has shared more and more of his duties with Chenault, who was eager--but not too eager--to assume them. "One reason it worked reasonably well was that Ken and I had a history of working together that was based on trust and respect for each other's business space," Golub says. In early 1999, Golub, then 60, announced that he would retire in April, 2001, and that the board had accepted his recommendation of Chenault as his successor. As it turned out, Golub retired a bit ahead of schedule, stepping down as CEO at the end of 2000. He will hand over the chairmanship to Chenault, 49, at the annual meeting in April. Chenault inherits a company in excellent shape. With $2.1 billion in net income on revenues of $16.4 billion through the first nine months of 2000, AmEx was running about 15% ahead of its record-setting results for 1999.
Unlike many new CEOs, Chenault will not have to look over his shoulder. Golub defines retiring as departing, not relocating from the executive suite to a permanent seat on the board. "If Ken wants my input, he knows where to find me," says Golub, who plans to involve himself in an Internet venture, though not as CEO.